THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Tuesday, February 4, 1997 TAG: 9702040210
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 30 lines
Responding to strong demand for a new class of stock, underwriters increased the size of an initial public offering of Circuit City Stores Inc.'s CarMax Group by 3 million common shares Monday to 21.86 million.
Underwriters for today's offering also set a price of $20 per share on the stock, which is scheduled to trade on the New York Stock Exchange.
If completed as planned, the offering will provide Circuit City with more than $400 million of additional capital. The Richmond-based retailer of electronics goods, appliances and autos said in a recent filing with the Securities and Exchange Commission that it planned to use the funds to expand its CarMax subsidiary and to repay debt.
Circuit City also said it will own 80 percent of CarMax after the stock offering.
CarMax, which opened its first store three years ago, has six stores in the Southeast and plans to open several others throughout the country.
For the nine months through last Nov. 30, the auto retailer rang up sales and revenues of $375.32 million. That was an 85 percent increase over $203.15 million in the comparable period of 1995. However, CarMax reported a net loss of $4.52 million for the nine-month period. That had widened from a $3.91 million net loss in the year-earlier period.
The underwriters for today's stock offering include Morgan Stanley & Co., Goldman, Sachs & Co., and Richmond-based Wheat First Butcher Singer.